10 Questions to Answer Before Starting A Cannabis Business

If you’ve got your sights set on starting a cannabusiness of any kind, you need to make sure you know the lay of the land first. There’s so much to understand, to consider, and to plan ahead for so buckle up while we lay down the top 10 do’s and don’ts of how to start a cannabusiness in Canada in 2022.

#1 Risks of Starting A Cannabusiness in Canada?

One of the simplest methods of mapping out the risks vs rewards of any given business opportunity is referred to as a ‘SWOT Analysis’. Many entrepreneurs, marketers and businesspeople use this tool to draw up the pros, cons, risks and rewards of any given business plan. Try doing one for your cannabusiness idea first before you ever get close to actually getting started.

Here’s a helpful template for SWOTs:

STRENGTHS
What are you good at?
What assets do you already control?
Do you have any pre-established unique offerings?

WEAKNESSES
What areas are you lacking in expertise?
Do you have a plan?
How favorable is your financial outlook?

OPPORTUNITIES
Do you have the chance to take over a pre-existing business?
Who do you know in the cannabis industry?
Where are you willing to go for success?

THREATS
What’s the competition like?
Who might get in your way? Why?
What roadblocks exist? Debt? Restrictions? Stigma?

#2 How to Start A Cannabusiness in Other Countries?

There are always risks to doing business in other countries, especially when we’re talking about a commodity/medicine that isn’t exactly well loved the world-over. So, you have to have a lot more assurances if you’re going to add the risks of doing business internationally on top of the amount of risks associated with cannabusinesses.

Do you have a business partner(s) native to the country you’re looking at operating in? What kinds of assets, properties, equipment and employees do you already have access to? Is there a way to manage a business overseas from your current home locale? These are the kinds of considerations you have to thoroughly plan out before you set up shop in foreign lands. Cannabis business isn’t looked kindly upon everywhere equally, so make sure you understand the socio-political environments around cannabis as much as you do the economics.

#3 What Kind of Business?

This might even be considered the #1 question you need to answer: What are you going to provide? Are you going to be a smoke shop? An edibles emporium? Do you have what it takes to sell everything online? Maybe you’re more inclined towards accessories shops? Perhaps a grow store is more your thing?

One of the fundamental components of any cannabusiness is capitalizing on your levels of expertise. Whether that means opening a cuttings/clones provider because you’re an amazing cloner, or you’re from a glass-blowers family that can make some mind-blowing bongs means you have to stick to your strengths first and foremost. You don’t have to limit your products/services to what you currently have the means to offer, but having a core business concept that fits your experience/skills will go a long ways towards early success.

Also consider what the markets are lacking when you’re deciding what to sell/provide. There are a lot of retail shops and online dispensaries, so maybe a cannabis growing locale will do better in your area? How about starting a cannabis cafe? Do you have previous business experience that you could apply to consulting others? There are a lot of avenues of opportunity in this industry, so choose wisely before starting a cannabusiness.

#4 Where Does Your Supply Come From?

Simply put, your buds make or break your business. You can have all the flashy marketing, sleek store designs, knowledgeable staff and viable location but if you don’t have access to some high-quality cannabis products then it’s all for nothing. One of the first things you should devote your time to is securing a stable, quality, unique and diverse supply of cannabis materials and products.

If you’re not a knowledgeable grower or have any in your organization, then you need to maintain good relationships with your suppliers. A business is only as good as its flowers, in most cases, so don’t skimp on quality for cost concessions if you can avoid it. The customers will always communicate to you about product quality, consistency and pricing so be sure to keep your eyes open and your ears perked for their essential feedback on your supply.

#5 How to Get Your Products Into Dispensaries?

If you are an expert grower harvesting multiple pounds per light then maybe instead of worrying about selling your buds you want someone else to do that part for you? Learning how to get your products into dispensaries can be difficult if you’re the type who spends more time with plants than actual people (nothing wrong with that, of course).

To establish working relationships with store owners or dispensaries managers you’re going to have to ‘wine and dine’ a little bit. Instead of fancy dinners or cocktail parties, you’re obviously going to be offering free samples of your top choice, bodacious nugs. Bring your best buds forward and let your growing expertise do the talking.

If you make edibles, concentrates or other refined cannabis products instead of just cannabis flowers then make sure to communicate the entire experience with your products. Illustrate the multiple benefits that your products offer, create a theme or tell the story of how they’re meant to be experienced. As a grower/manufacturer it’s your job to paint the picture of your cannabis so that others can behold it in all its glory.

#6 Are You Licensed?

There are a million and one ways to grow cannabis, millions of products to choose from and millions more options for business locations and who to hire, but one of the most essential decisions you have to make early on has to do with licensing. This may or may not be a big deal for your cannabusiness. Once you’ve decided how to start your cannabusiness you need to decide whether you’re going to get licensed and go the legal route, or stick it out and try your hand in the legacy market.

There are pros and cons to being licensed in the legal market vs the freedoms of the gray market, so it’s really up to you, your experience, your expertise and how you’re set up. No matter what route you choose, you’re going to have to get approvals and some form of licensing from your local municipal government (i.e. business license, insurance, securities, etc) so make sure you take stock of what’s available, how expensive it is and compare it with other options.

#7 Cheapest Places to Open Dispensaries?

This should be an easy one to answer, unless you live in a major Canadian city. Most regions have a number of cannabis stores opening up every other month it seems, so for many entrepreneurs looking at starting a cannabusiness it’s as simple as finding the cheapest place to open a dispensary. To pick the right location or platform for hawking your weed wares, you should consider:

● Competition in your area(s)
● Number of stores vs availability of online distribution (i.e. shipping, overhead, pricing, etc)
● Upfront costs (buildings, equipment, staff vs domains, website maintenance, payment processing)
● Market trends, consumer buying behaviors, etc

#8 Online Or Retail?

The United States has well over 40 States that have legalized marijuana in some capacity (recreational, medical or both). States like Colorado, Washington State, California and a lot of the Western jurisdictions are a lot more favorable to cannabis business than others. You can certainly go elsewhere, just be sure to do your homework on their attitudes and policies towards cannabis before you choose a new location.

Mexico has recently legalized cannabis across the country, so expect this tropical hotbed to become a literal paradise for cannabis people moving forward. Similarly, South America has a strong cannabis tradition throughout many of its nations, as do many European countries. The world is waking up to a shared cannabis reality – slowly but surely – so it can pay dividends to do business in places outside of Canada if you’re smart, patient and hard-working.

#9 Who’s Right For The Job?

Who you put in charge of what, how you empower them to do good works, how they’re trained and how you capitalize on their strengths makes or breaks your efforts as a manager/owner. Never skimp on training, benefits, wages, or rewards for hard work and you’ll find that your staff will never cut corners or leave you holding the bag.

In the same vein, your customers need to be managed as much as your employees. Always going above and beyond for your customers – even if they’re a major pain in their own right – will yield success, more often than not. Happy, high customers means profits for you but also a positive community of cannabis users whose lives have been changed for the better by your products/services. What’s more meaningful than that?

#10 What’s Your Brand/Company Story?

One of the core secrets of learning how to start a cannabusiness is not really that secretive at all: you need to have an identity, tell your story, and stick to it. You’ve heard of the phrase “stick to your guns”, well how about ‘sticking to your buds’?! You have to have the passion, the drive and the know-how to make your cannabusiness thrive. This means a ton of hard work, taking your lumps but maintaining the course through the thick and thin days of sales.

Throughout your cannabis business journey you need to be consistent with your brand or company identity. Is your company committed to sustainable growing, production and packaging? Perhaps you’re more of a mad scientist who is obsessed about genetics and providing the utmost quality plants? Or maybe your unique offering includes the best, personal approach to finding the right cannabis for your medical patients?

In all of these examples, the company will suit a certain role, theme or tell a unique story that makes their business stand out. You might not have the most unique company story but you make some damn fine potent edibles. That’s fine too. Whatever you do, make sure you’re doing it well, you’re doing it your way and that you’re committed to your vision/goals. However you get started in this wacky world of weed, just keep on keeping on and do your best – the cannabis faithful will reward you for your commitment to this one-of-a-kind plant and its incredible communities.